At WTO Meeting, The Issue Of U.S. Steel Import Restrictions To Be Raised By South Korea

04/22/2017

At World Trade Organization committee meetings next week, the trade ministry of South Korea is planning to raise the issue of U.S. restrictions on steel imports the ministry said on Friday.

The possibility of new tariffs was raised after U.S. President Donald Trump launched a trade probe on Thursday against China and other exporters of cheap steel into the U.S. market, and this move by South Korea is in connection to that probe.

A series of anti-dumping duties on steel imports from South Korea and other countries have already been imposed by the United States. According to South Korea's steel association, accounting for nearly 12 percent of the country's total exports of the metal in 2016, the United States is the biggest market after China for South Korean steel products.

In response to "deepening U.S. trade protectionism," the government and South Korea's steel industry should consider all measures including filing a complaint with the WTO, a South Korean steel company official had been quoted in the media recently as saying. The South Korean government was considering its response to the U.S. move, reported the media citing information received from a senior official at South Korea’s trade ministry.

"We are open to all possible options including filing a complaint with WTO but nothing has been decided. We will decide after listening to opinions of the Korean steel industry," the official reportedly told a section of the media. Since the matter is sensitive, therefore, the ministry official and the company official asked not to be identified.

"The government will closely monitor related trends and will actively respond together with private companies," the Ministry of Trade, Industry and Energy said in the statement. At the WTO committee meetings set to be held on April 25-27 in Geneva, the issue would be raised, it said.

The ministry said that in order to gather opinions and discuss ways to deal with the situation, South Korean trade minister Joo Hyung-hwan will have a meeting with Korean steel companies on April 27.

"Rising trade protectionism is negative to the steel industry overall, but the industry has been recovering, helping cushion the negative impact," said Will Byun, an analyst at NH Investment & Securities.

Beating its estimate on solid demand from China, its first-quarter operating profit more than doubled, POSCO said on Tuesday.

Trump signed a directive asking for a speedy probe under section 232 of the Trade Expansion Act of 1962 at a White House meeting that included executives of several U.S. steel companies. For reasons of national security, the law allows the president to impose restrictions on imports.

The steel index had been drifting lower since February even though steel shares had surged after the Nov. 8 U.S. election on optimism over increased infrastructure spending under Trump.

While steel analysts said declining iron ore prices and other factors have weighed on industry shares, investors in recent months have begun to question how soon Trump's pro-growth policies might be implemented.